MAP allows a path into sequestration, the term used in Scotland for bankruptcy, for people on low incomes and with few assets who may not otherwise be eligible for a formal debt relief solution.
As long as the specified criteria are met, you can apply for your own bankruptcy via the Minimal Asset Process and potentially be free of unsecured debts within six months.
In order to be eligible for the MAP route into bankruptcy, the following criteria apply:
The Common Financial Tool is used by money advisors in Scotland to decide on eligibility, and to ensure that the correct insolvency product is offered.
Once the guidance of a professional money advisor or organisation has been sought, they will need to review all debts, income and assets. Following this review, they will be able to let you know whether the Minimal Asset Process is the best way forward. Once eligibility has been established, a fee of £90 will be payable and is dispatched with the application.
All money advisors are required to provide their name and address, and declare that formal advice has been given. Guidance should cover the debtor’s financial situation, and the options available to them. Additionally, advisors will be expected to inform the applicant of the repercussions of formal insolvency, and provide assistance in completing the Minimal Asset Process application form.
When MAP bankruptcy has been approved, creditors will be unable to take any further legal action.
There are certain debts that cannot be included in MAP sequestration. These include:
– Student loans
– Court fines
– Arrears of Child Maintenance payments
Minimal Asset Process bankruptcy generally ends after a period of six months, although you will continue to be subject to restrictions on taking out borrowing for a further six months.
The Minimal Asset Process is noted on your credit file for six years, and will adversely affect your ability to obtain credit during this time. Additionally, your name will appear on the public insolvency register.
Apart from having an effect on your credit file, MAP bankruptcy may impact on other areas of life:
The timescale of MAP has been set at six months, and has halved when compared with LILA. This allows people in Scotland with few assets and low income to escape the debt trap quickly.
Debtors don’t have to wait to be forced into bankruptcy by a creditor, which was the situation prior to 2009 when LILA was introduced. People then were stuck in the situation of being unable to pay off their debts, but also not able to declare themselves bankrupt.
The low application fee of £90* also makes it more affordable for debtors with the lowest incomes, and the requirement for professional financial advice ensures that only those with the most need are able to make a Minimal Asset Process application. (*MAP application fees are temporarily removed for those in receipt of specified benefits, and reduced to £50 for all others following the Scottish Coronavirus Act.)
We are professional insolvency advisors and can help you decide whether MAP is the best option for you.
The Register of Insolvencies is a public register that documents Trust Deeds until five years after the discharge date and includes personal details.
Joint Trust Deeds don’t exist, however, if you want to run a Trust Deed that encompasses debts as a couple, this will be two individual Trust Deeds.
Our Scottish based team can help advise you on your debt problems.